What is your China strategy?
- Online vs offline opportunities, which should come first?
- Is your competitors there?
- Is there a demand at that price?
- Partner or your own?
- Who is your consumer
- Where, how old?
- Different regions, different characteristics in China
- Resources available internally?
- Are you ready to invest time in it?
- Importance of insights / data
China growth is slowing down but still it grew 6% last year
Chinese consumer
- Government policies to promote domestic consumption
- Domestic consumption is the main source of growth
- Ratio online – total retail overtook UK with 23%
- Large population with increasing spending power
- Becoming more sophisticated – needs and desires changing
- 2015 high and upper middle disposable income 10%
- 2030 it will increase to 35%
- People are moving up the scale of disposable income
Routes to market
- Retail
- Daigou: Chinese tourists purchasing from abroad and selling back in China
- Tourists: Chinese tourists spend considerably more than most other tourists
- Distributor
- Hard to find a distributor but easy afterwards
- You don’t control the sales process or how your brand is presented etc
- Cross border e-commerce platforms
- .com website
- Historically Chinese people are emarketplace focused
- People who have been successful on their .com sales, have bit of brand awareness
- Google is nothing in Chinese, SEO does not matter in China
- Native Chinese platforms are much better
- Chinese marketplace + 3rd party or trade partner
- .com website
Routes to market
- General import
- Product registration
- Import permit
- General import
- Distribution retailing
- Consumers
- Cross borders ecommerce
- Customers order online
- Ecommerce / postal clearance
- Consumers
Books or other products that might need to go through content checks, might not be suitable for ecommerce.
VAT in China was 16% and now going down to 13%
Huge distrust in locally manufactured brands and goods in China, especially in mother and kid products. High quality and healthy perception.
Diversification
- Intense competition
- Consumers are using a greater variety of ecommerce platforms
- 1 app users were 48% in 2016 , then it is 29% in 2017
- 5 app users were 5% but now 14%
- Don’t use different distributors for different ecommerce platforms – price cuts can be problematic
- Ecommerce app users
- Taobao most popular
- Pinduoduo
- Cross border ecommerce market (B2C) competitive landscape
- Tmaill
- Kaola
- Jd global
- VIP
- Amazon
Website performance
- Range of payment options
- Alipay, wechat
- Great firewall of china
- Not only censorship but slows downs everything from outside of the country
- Good website performance is important
- Fast delivery to mainland china
Top influencers when chinese consumers buying through cross border online
- 50% Word of mouth from friends
- 32% social media comments
- 25% seo search results . that is baidu
Is it for me?
- There are many routes to market
- Doing it alone is expensive
- Being British / European & Foreign is not enough
- It can be a relatively easier route to market, but is still a complex and time consuming process
- A key challenge is that many chinese buyers are risk averse and brand conscious
- Models are shifting – e-marketplaces introducing e-taling into their models, social commerce is on the rise
- Building brand awareness in an increasingly crowded market takes, patience, ingenuity, deep pockets and often luck
- But… if you have the right product or brand, there can be a real opportunity
You should register your trademark in China before pitching it.
It will cost you about 1000 GBP
It can take a long time 18 months. But you are OK to trade if your application is in.
https://www.regroup-media.co.uk/
China digital landscape
Market size
- Biggest online market in the world – 800M online, 1/5 of the World’s internet users
- 80% internet is through mobile in CN
- 50% mobile in UK and US
- China now counts as 40% of all online transactions
Digital channels
- No google, ebay, facebook, Twitter, paypal
- Yes Linkedin and Amazon
English language
- Fluent English 1%
Seasonality
- Digital trends are very seasonal
- Paid advertising can exploit these peaks via special promotions
Channels
- Web presence
- More for brand awareness than selling
- Localised web presence does reaffirm a desire to engage with a China audience
- Partly protection, partly reach
- Host the site locally in China to make it open faster, an ICP licence is required or use a CDN
- What works design-wise in the West doesn’t necessarily work in China
- Search engine landscape
- Baidu dominates the landscape
- Little less sophisticated than Google
- Organic and paid similar to Google
- Baidu dominates the landscape
- Social
- Weibo – shorter posts, facebook and twitter like
- Sophisticated advertising like FB
- Younger audience
- Cheaper cost per ad
- Brand awareness
- Wechat
- Many things, 1 billion+ users,
- 5st biggest social media channel in the world
- Biggest in China
- Way more than whatsapp
- More like an ecosystem
- Calls, messaging, ecommerce, payment gateway, games
- Social media, bookings, pictures (like IG)
- 900M users are based in CN, 100M are outside of CN
- 86% users between 18-36
- High skewed on urban, professional
- Highly engaged
- 50% of users use for 90 mins
- 30% of all time spent on mobile in CN is on Wechat
- Lengthier posts, more like blog posts
- Mini programs
- 200M people use them
- Smaller and more streamlined than traditional apps
- No download for individuals
- Load faster, hosted in Tencent servers
- 20% of the cost for 80% of functionality
- Ecommerce, flash sales,
- Wechat ads
- Influencer marketing (KOL)
- In later stages, where the brand is already established
- Wechat pay
- 600M users. Biggest along with Alipay which these 2 dominate
- Wechat 0.6%, banks get 1.5% to get money to UK
- Weibo – shorter posts, facebook and twitter like
Summary
- Wechat is a good place to start, for proof of concept
- Cross border model
- When a shopper sells directly to CN from UK
- Distributor model
- Spike in orders
- Visibility issues
- Distributors dont tell you who they are selling, how they are selling
- Product pages needs to be longer, more details
- Royal mail tmall

I’m founder and director of The Digital Agency; a certified Google Partner and Shopify Partner digital marketing agency operating in London and Istanbul. The Digital Agency has a solid track record of delivering high growth in eCommerce, Facebook & Google advertising, social media communication, search engine optimization, eCommerce and website production through 16 years of experience with 140 brands in 500 projects. Visit The Digital Agency here